OneSpan Inc (OSPN), a provider of authentication software, saw its shares plummet 15.86% in pre-market trading on Friday, following a disappointing third-quarter earnings report and a significant cut to its full-year 2025 guidance. The steep decline comes on the heels of a 14.25% drop in after-hours trading the previous day, as investors reacted to the company's financial performance and lowered expectations.

For the third quarter, OneSpan reported revenue of $57.1 million, representing a modest 1% year-over-year increase but falling short of analyst expectations of $58.2 million. Despite beating earnings per share estimates with $0.33 against an expected $0.29, the company's operating income saw a substantial 27% decrease compared to the same period last year. More concerning for investors was OneSpan's decision to slash its full-year 2025 guidance. The company now projects revenue between $239 million and $241 million, down from the previous forecast of $245 million to $251 million. Additionally, Annual Recurring Revenue (ARR) guidance was reduced to between $183 million and $187 million, from the earlier projection of $186 million to $192 million.

Adding to the negative sentiment, D.A. Davidson cut its target price for OneSpan from $15 to $13, reflecting diminished confidence in the company's near-term prospects. This analyst action, combined with the disappointing earnings report and reduced guidance, has likely contributed to the significant pre-market sell-off. Investors appear to be reevaluating OneSpan's growth trajectory and profitability potential in an increasingly competitive authentication software market.